Printed Headline: Long-Term Tactics
Given the less-than-optimistic geopolitical and economic news surrounding the Middle East last month, I wasn’t sure what mood to expect at this year’s MRO Middle East Conference & Exhibition in Dubai in February. Spoiler: It was energetic and optimistic. This was a pleasant surprise but not exactly what I had anticipated.
Air Arabia CEO Adel Abdullah Ali eloquently captured the sentiment: “To reach the sky, you have to go through the clouds,” he said. While he thinks the geopolitical challenges and increasing oil prices could negatively affect airlines in the region, the long-term prospects are good. As he noted, “Part of this involves airlines in the region adjusting capacity to sustainable levels”—an action he anticipates will happen within the next year, so that margins do not diminish too much.
While businesses constantly adjust to shifting market demands, they do so to remain sustainable—and that indeed is what’s happening to the Middle East MRO market. It is becoming more sustainable and self-sufficient. It is developing—or partnering—to gain deeper aftermarket capabilities to keep more work in-region. In other words, it’s building for the long term.
For instance, Turbine Services & Solutions (TS&S), a Mubadala company, has a clear vision “to build a strong aerospace industry in Al Ain and Abu Dhabi,” says Abdul Khaliq Saeed, TS&S CEO. In November 2015, Mubadala signed an agreement with GE to form a GEnx engine MRO facility at the Nibras Al Ain Aerospace Park, which will service the engines in the region and expand TS&S’s capabilities.
At the Farnborough Airshow last year, it signed an agreement with Rolls-Royce to become an approved maintenance center for the Trent XWB in the emirate. Both announcements expand on initial cooperation deals forged in 2013. At MRO Middle East, it signed a V2500 engine parts repair agreement with MTU Maintenance.
JAV Technic, part of Jordan Aviation, which also owns Jordan Aviation Airlines, expects to receive its European Aviation Safety Agency Part 145 maintenance approval by the end of March, according to Jordan Aviation CEO Zuhair Al Khashman. That MRO is adding aircraft maintenance capacity and expects to grow enough to need to start constructing a second hangar in 2019.
Thanks to its new facility at Dubai South, Lufthansa Technik (LHT) Middle East can repair larger components, such as GE90 radomes and thrust reversers, which it could not accommodate in its previous location. In addition to handling bigger parts, Ziad Al Hazmi, LHT Middle East CEO, says the MRO has increased its repair capabilities and can now handle overhauls for reversers, composites and aircraft-related components it services there. He is also looking at expanding the component types it repairs and may even set up on-wing engine repair. He tells me he expects to announce the specifics by year-end.
These are just a few examples that came from conversations at MRO Middle East, which continued to bustle at closing time. It was good to see such positive energy.
The Middle Eastern MRO market is maturing and is definitely looking at the long-term.